Xcel rethinks Prairie Island uprate plan

02 April 2012

US utility Xcel Energy has reduced the size and delayed the schedule of a planned uprate at its Prairie Island nuclear power plant in Minnesota following a reassessment of the project's value to customers.

Prairie Island (Image: Xcel Energy)

Xcel applied to the Minnesota Public Utilities Commission (PUC) in May 2008 for a certificate of need to increase generating capacity at its two-unit 1100 MWe Prairie Island plant by 164 MWe. The PUC, deciding that the project would provide value to customers, granted the necessary certificate in December 2009. Following approval from the US Nuclear Regulatory Commission (NRC), 18 MWe of this uprate was implemented in October 2010 through more accurate feedwater flow measurements which saw unit 1's capacity increase from 551 MWe to 560 MWe and unit 2 from 545 MWe to 554 MWe. The remainder of the uprate was scheduled to be implemented between 2014 and 2015 at a cost of some $322 million.

After reviewing the project, Xcel now says that an uprate of only 135 MWe could be achieved cost effectively, not 164 MWe as originally proposed. In addition, the implementation of the uprate has been delayed due to changing federal review requirements following the Fukushima accident last year. According to Xcel, the NRC may now take 30-36 months to review licence amendments, instead of the previous 12-22 months. Meanwhile, long-term growth in customer electricity demand is now expected to be some 40% less than estimated when the uprate was proposed. Falling natural gas prices have also made gas-fuelled plants a more attractive alternative than increasing Prairie Island's capacity.

Xcel has now filed a request with the PUC to reaffirm that increasing the plant's capacity is in its customers' best interest before continuing with the project. The filing, it said, was "prompted by changes that occurred" since the commission issued the certificate of need. In its filing, Xcel noted that "there are possible combinations of new conditions that could lead to the conclusion that the Prairie Island project no longer is cost effective."

Judy Poferl, president and CEO of Xcel subsidiary Northern States Power Company Minnesota, commented, "Work completed so far has given us a better understanding of the project's costs and benefits, as well as the uncertainty that remains." She added, "The project is still expected to benefit customers; however, the magnitude of the benefit is substantially lower than originally anticipated."

The company intends that the project to implement an uprate of 117 MWe at the two reactor units - 18 MWe having already been added - would not happen until between 2016 and 2017 at the earliest. The cost of uprating the plant by 135 MWe would be about $310 million. Under the original plan to increase the plant's capacity by 164 MWe in 2014-15, the benefit to customers over the next best alternative was estimated at some $433 million. However, under the revised plan, the customer benefit is about $50 million.

Units 1 and 2 began life in 1973 and 1974 respectively with 40 year licences due to expire in 2013 and 2014. In June 2011, the NRC granted 20 year licence extensions for both pressurised water reactors at Prairie Island, allowing them to operate until 2033 and 2034, respectively.